UK government must immediately open up the £1.5 billion in business rates relief offered to food wholesalers nine months ago, or face potential supply chain failures, Federation of Wholesale Distributor (FWD) warned earlier this week.
“Having battled through almost two years of lockdowns and labour shortages with very little support from the Chancellor, wholesalers have been relying on a busy Christmas to start their recovery from the losses of 2020 and the early part of this year when their customers were closed”, FWD said in a statement.
With demand falling in restaurants and pubs as Covid cases rise and the spectre of further restrictions on hospitality venues in the coming weeks, the promised Covid-19 Additional Relief Fund (CARF) set up by Rishi Sunak in the spring is now desperately needed, FWD said.
The federation further pointed out that food wholesalers were specifically mentioned in the announcement on March 25 as an example of beneficiaries of the fund – the first time they have been given access to the business rates relief offered a year earlier to supermarkets and other parts of the food supply chain. But nine months later, no guidance has been given to local authorities on how the fund should be allocated, it added.
The wholesalers who supply restaurants and pubs also deliver to vital services such as hospitals, care homes, schools and prisons.
The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill, which releases the £1.5bn funding, has been passed by Parliament and is now awaiting royal assent.
FWD Chief Executive James Bielby said that wholesalers have “struggled to recruit and retain staff as labour costs have increased”. They’ve had to absorb stock shortages and rising energy bills, and they’ve seen their teams hit by illness, isolations and a hot labour market.
“With the new restrictions now in place, Christmas isn’t going to be the boost they desperately needed and the New Year could be very challenging indeed if demand is restricted again. The money that could keep some wholesalers’ doors open through the winter is available – but they can’t access it,” Bielby said.
The demand from FWD comes amid calls from Federation of Small Businesses (FSB) to reinstate the Covid sick pay rebate so smaller firms can recover the cost of supporting those who need to isolate and relaunch the workplace testing initiative – enabling test and release in scenarios where staff are pinged at work.
FSB national chair Mike Cherry also asked to increase the current 66 per cent business rates discount for hardest-hit firms to 100 per cent to directly assist firms with the spiralling costs of doing business.
“Coupling that adjustment with an increase in the targeted Employment Allowance to £5,000 would make a real difference. Policymakers also need to accelerate delivery of the £1.5bn business rates relief fund. It was launched many months ago, but is yet to pay out a penny,” he said.
